7 Unit Mixed Use for $260,000

[Jeff Boyle]

Investment Info:

Other commercial investment investment.

Purchase price: $260,000
Cash invested: $65,000

3 retail units and 5 residential units. Rents are significantly under market rate at the time we purchased them. We should go from $2200 a month to close to $4000 a month when we adjust the rates.

What made you interested in investing in this type of deal?

The monthly cash flow. It was brought to us by another agent and the rents were all under market rates. There was one tenant that had lived in there for 30 years and was paying 1/2 of market rate, and there was another tenant that had been in there for 12 years and was paying 60% of market rate. Everything, including the retail spaces, were under market rate. Also, the property was in fantastic condition, however, there are two residential units and one retail unit that we can fix-up.

How did you find this deal and how did you negotiate it?

It was brought to us by another agent before it hit the market. We wrote an offer for the price that they were asking for it and ended up getting it $5,000 cheaper after inspection.

How did you add value to the deal?

I simply looked at what the cash flow on t his property could be after rents were raised.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, even though I am a realtor myself, we had a realtor represent us and the seller had a realtor represent her. I did not take a commission on it.